Taxes

One of the biggest concerns for many is the taxation system in any given country. In most countries, this system is what drives the economy and infrastructure, increasing the population’s quality of life. In Armenia, taxes are directed mostly into the federal budget, with only property and local duties transferred to the municipalities. 

Things you are NOT taxed on include:

• Dividends, irrespective of country of origin, level or participation, or nature of investment

• Capital gains on the disposition of shares, irrespective of holding period

• Insurance payments from foreign sources

• Net worth

• Stamp or transfer tax on the sale of shares or real estate

• Municipal business tax

• Branch remittances

• Gifts or inheritance

How do I pay my taxes?

In Armenia employers and other entities paying income to individuals (“tax agents”) are normally required to withhold taxes and pay them to the government on behalf of these individuals. As a result, individuals do not have to file annual tax returns, unless they have received income that is taxable and has not been declared by a tax agent.

Do I have to register somewhere?

As a general rule, you do not have to register with tax authorities and obtain a taxpayer ID. However, you may be required to register as an “individual entrepreneur” and obtain a taxpayer ID if you engage in “entrepreneurial activity,” i.e. independent and periodic sale of goods or services with the purpose of making profit. If you are an individual entrepreneur you may qualify for one of the forms of simplified taxation for small and medium enterprises (e.g. turnover tax) that replace the regular income tax.

Do I have to file taxes?

You do not have to file tax returns, unless you have received income that is taxable in Armenia and has not been accounted for by the entity that paid the income, e.g. your employer, customer  

What do I do if I'm contacted or visited by tax authorities?

Interactions between tax authorities and taxpayers are strictly regulated and can take place only within the proper administrative or criminal proceedings. Inspections on the premises of the taxpayer must be specifically authorized in writing by the head of the competent tax office. The taxpayer should receive a notice on inspection at least three business days in advance, unless such notice would defeat the purpose of inspection (e.g. checking compliance with regulations on registering employees, use of foreign currency, issuance of payment receipts etc.). Any action or inaction of tax officials may be appealed administratively to the superior body or judicially by filing a claim with the administrative court.

Types of Taxes :

Business and Employment

• Income Tax 

  • As of January 2023, the taxes have been equalized across the board at 20%

  • Interest, royalties and rent (renting out your investment property) are taxed at 10%

  • There is a strong double taxation treaty network with 41 countries, as of 2019

• Value Added Tax (VAT) 

  • This is set at 20% and amount to nearly half of the tax revenues in our budget

• Excise Tax

  • Certain products, including cigarettes, are subject to excise tax. This tax is set to increase by 3% annually, as of 2020. Please refer to the laws for this one - click here

• Property Tax

  • For public and industrial buildings, a 0.3% tax comes into play

• Corporate Tax

  • Set at 18%, this number has not seen any change over the years

•  A Turnover Tax exists for businesses exceeding a turnover of $141,000 USD - 1% for trade, 3.5% for manufacturing, and 5% for all other activities

• A Branch Tax of 18% is applicable if a foreign company opens a branch in Armenia

• A Capital Gains tax of 18% is imposed on profits generated from assets transfers

For more information on double tax treaties and taxation in general in Armenia, please check armenian-lawyer.com or click here for the specific page

Personal 

• At the moment, there are no taxes on inheritance or gifts, nor on land capital gains, property sales to other individuals, bonds issued by the government, equity securities, and securities representing investment in a relevant investment fund. 

• Capital Gains Tax

  • If a property is sold by an individual to a company/organization, there is a 10% tax

  • If a property is sold for business purposes, or acquired by a developer, a 20% tax

• Social Security Tax 

  • Social security taxes are evaluated at 5% of income up to 500,000 AMD, 10% of income exceeding 500,000 AMD). Basic old age pension starts at 63 years of age.

• Property Tax - property tax in Armenia is set as a percentage of the initial purchase value and reevaluated every 3 years, it includes the value of the land and all structures built on the parcel click here (refer to chapter 46)

On January 1, 2021 the new amendments to the Tax Code entered into force setting the following annual property taxes on apartments valued at:

• Up to 10 mln. AMD - 0,05% of tax

• 10 to 25 mln. AMD - 5000 AMD tax plus 0,1% if exceeds 10 mln.

• 25 to 47 mln. AMD - 20,000 AMD tax plus 0,2% if exceeds 25 mln.

• 47 to 75 mln. AMD - 64,000 AMD tax plus 0,4% if exceeds 47 mln.

• 75 to 100 mln. AMD - 176,000 AMD tax plus 0,6% if exceeds 75 mln.

• 100 mln. AMD and more - 326,000 AMD tax plus 1% if exceeds 100 mln.

Taxes on houses will be as follows: 

valued at:

• Up to 7 mln. AMD - 0,05% of tax

• 7 to 23 mln. AMD - 3500 AMD tax plus 0,1% if exceeds 7 mln.

• 23 to 50 mln. AMD - 19,500 AMD tax plus 0,2% if exceeds 23 mln.

• 50 to 85 mln. AMD - 73,500 AMD tax plus 0,4% if exceeds 50 mln.

• 85 to 120 mln. AMD - 213,500 AMD tax plus 0,6% if exceeds 85 mln.

• 120 mln. AMD and more - 423,500 AMD tax plus 1% if exceeds 120 mln.

• Car Sales Tax

  • Since January 2020, the tax on the purchase and sale of a car will be 1% of the price, but this cannot be lower than 150 drams for each horsepower. This tax liability arises if the sale is effected earlier than 365 days after the purchase. 

  • An environmental tax is now in effect, starting from September 2019

• Land Tax

  • Land tax is set at 15% for land deemed for agricultural purposes

  • Industrial land is taxed at 1% and 0.5% for residential and non-residential zones, respectively; 0.6 percent for land used for housing in rural areas (villages); 1 percent for land that is forest; 1 percent for all other non-agricultural land.

• Military Tax: to the Military Insurance Fund